Posts Tagged ‘car sales reduction’

Beijing introduces number plate lottery to cut car sales by 75%

January 16, 2011

Last year 890, 000 cars hit Beijing’s streets contributing to the city’s legendary gridlock and traffic emissions.

Gridlock in Beijing: image

From 1st January this year a lottery for number plates will provide only 20,000 winners each month restricting sales of both new and second-hand cars in the city to 240,000 this year. 210,000 people have applied for the 20,000 licenses available for January. Winners must buy a car within six months. Losers in this month’s lottery will be included in next month’s drawing along with all new applicants.

CRIenglish reports:

Car dealerships in Beijing may opt to shift their focus on boosting sales to neighboring cities after the municipal government imposed an annual quota on new car license plates as part of efforts to ease traffic gridlock in the capital city.

Some car dealerships, especially of domestic brands, are making plans to expand sales to areas outside Beijing where the policy restriction does not apply, the China Business Times reported. The new limit means buyers will favor high-end and luxury types of cars once they obtain the hard-to-get licenses. Domestic brands and small cars, which sell mostly at below 100,000 yuan, will see lower sales in Beijing, the newspaper article said.

The policy stipulates that buyers of secondhand cars must go through the monthly lottery system to obtain a license and sellers of used cars will see their license annulled in a year if they make no new purchases. That puts dealers of both new and used cars to compete in the same arena for the annual 240,000 new car license plates.

The combined factors have driven many companies to stock up cars, including used cars, in preparation for the coming hike in rental businesses. Car dealerships are tapping into this market, putting types of cars idling for sale ready for renting….. Meanwhile, industry experts predict the big automakers will likely adapt by focusing more on smaller cities further inland, the China Daily quoted Zhong Shi, an independent analyst in Beijing as saying.

“The best and most efficient way for automakers to offset the declining sales in Beijing and maybe other first-tier cities in the near future is to shift rapidly their dealer network expansion inland,” said Zhong.

Besides easing traffic jams, the new policy will help address serious air pollution problems in the Chinese capital city. Car emissions account for around 50 percent of the air pollution in Beijing.

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